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C-store Beverage Sales Climb in September

NEW YORK -- September proved to be a good month for beverage sales in the convenience store channel.

According to Wells Fargo Securities LCC's latest Beverage Buzz survey, non-alcoholic beverage sales in the c-store channel ticked up about 8 percent year-over-year in the third quarter. The survey includes beverage retailers representing approximately 10,000 convenience store locations across the United States.

Specifically, 92 percent of survey respondents indicated that sale of non-alcoholic beverages increased year-over-year in the third quarter. The results are a marked improvement from July and August trends, explained Bonnie Herzog, managing director of beverage, tobacco and consumer research at Wells Fargo Securities.

"Given the sluggish trends we have seen in the take-home channel scanner data for 3Q, we think c-store sales could provide a needed boost to drive beverage companies top-line results," she said.

Looking toward the fourth quarter, 67 percent of the survey respondents said they expected beverage manufacturers to take additional pricing, with only 11 percent expecting a price reduction. Wells Fargo Securities estimates that beverage manufacturers may take an additional 1-percent to 1.5-percent price increase in the fourth quarter.

The Beverage Buzz survey found that four key factors affected beverage sales in the third quarter. According to Herzog, 62 percent of respondents indicated that gasoline prices had a negative impact (54 percent slightly worse/8 percent much worse) on beverage sales; 54 percent of respondents indicated that the impact of weather on beverage sales was better in the third quarter of 2012 than the third quarter of 2011 (31 percent much better/23 percent somewhat better); 54 percent of respondents indicated that foot traffic was better in the third quarter of 2012 than the same quarter last year (8 percent much better/46 percent slightly better; and, 62 percent of respondents indicated that higher retail price points benefitted sales in the third quarter of 2012 compared to the third quarter 2011.

Looking at specific products, the Wells Fargo Securities survey found that the average retail price for Coca-Cola products inched up 2 percent year-over-year and volume increased 2.2 percent year-over-year. The survey also found that the average retail price for PepsiCo beverage products increased 2.1 year-over-year and volume increased 3.5 percent year-over-year.